By Christiana Sciaudone
Investing.com -- Renewable Energy Group (NASDAQ:REGI) rose almost 5% after getting a buy rating from Citi.
The firm initiated coverage on the stock with a price target of $90. The company is a producer of biomass-based diesel in North America.
"REG is a biofuels pure-play with ambition to step-change its margin structure upward through the planned RD expansion at its Geismar, Louisiana plant," Citi wrote in a note according to StreetInsider.
The firm sees a 30% internal rate of return on the project. Return on invested capital should double to 32%. Intermediate-term, there is margin compression risk in the existing business, but this seems more than partly reflected in its valuation.